http://www.nytimes.com/2014/03/16/opinion/sunday/the-rise-of-anti-capitalism.html?action=click&contentCollection=Technology&module=MostEmailed&version=Full®ion=Marginalia&src=me&pgtype=article
[Article appears below. First, my rant.
In my opinion, growth in the non-profit sector is almost never good
news. In my experience, the non-profit sector generally grows only if
there is a sustained excess demand for their services over existing
supply. Unlike the for-profit sector, funding is difficult to obtain
for non-profits (and I speak from long, personal experience).
Where government funds non-profits, it is generally because the need for
the service is undeniable, and the non-profits are chosen as the
response tool because it costs less than a for-profit solution. That
usually means the services are provided by volunteers or staff who are
paid less than their equivalent in the for-profit sector. (Again, long
personal experience.)
Let's consider the sectors where non-profits generally operate.
Health care. Social services. Elder care. Outreach and support for
the financially challenged (often due to addiction and substance abuse;
mental, psychological or physical health issues). Environmental issues.
Justice system issues. Human rights issues. Hunger. Housing. Abuse.
(In my world view, most formal educational [day-care, schools, colleges
and universities] and acute [hospitals] and primary care [clinics,
doctors, dentists, podiatry, chiropractic] is not non-profit, but a mix
of government and for-profit agencies.)
In general, a non-profit organization arises because a societal level
need is identified, persists, and is not being addressed by for-profit
agents, government or any other existing structure. (If the issue is
smaller than societal level, an organized response is not required. It
the issue is not persistent, there is not time to build and sustain an
organized response. If there is a existing solution, no need to build a
parallel non-profit response.)
I am all for building social capital, but let's be clear about what that
is. Hospitals, medical clinics, fire departments, educational systems,
accessible Internet, many utilities, community-owned facilities (and
much more) constitute social capital. Food banks (as an example) are
not; they are a symptom of a problem that could be easily eliminated if
we addressed the underlying issue appropriately. I am not advocating
ignoring or hiding the issues (an approach designed to reduce
expenditures and concentrate wealth), but solving them by giving
individuals the resources to look after themselves. (I recognize there
is a small minority who do not have the capacity to fend for themselves,
and I expect to support them. However, to continue with the food bank
example, if someone has the ability to use a food bank, they can likely
use a grocery store if they have funds.)
As for Rifkin's assertion we approaching a zero-marginal-cost for many
goods, like many neo-cons, he is ignoring the fact that major
corporations have effectively downloaded the main part of the delivery
infrastructure cost onto customers and government (e.g., computers and
the Internet backbone), while reducing the price of content
(intellectual property, aka someone else's income) to near zero. News
used to be delivered on paper, where the media supplier supplied the
content and delivery channel. Now, the customer supplies the delivery
channel (electronic device and Internet connection).
The real change is the devaluing of labour and allowing wealth to be
concentrated by those that control the contrived bottlenecks in how we
actually operate our society. The rest is mechanics. If you want
social capital to expand, then let government and community-owned
organizations run the services we value and own the related
infrastructure. Is e-mail killing Canada Post because of the reduced
volume of letter-mail? Then, make Canada Post the agency that runs the
Internet backbone in Canada, rather than for-profit telecom companies.]
=======================================================================
SundayReview|Opinion
The Rise of Anti-Capitalism
By JEREMY RIFKIN
MARCH 15, 2014
WE are beginning to witness a paradox at the heart of capitalism, one
that has propelled it to greatness but is now threatening its future:
The inherent dynamism of competitive markets is bringing costs so far
down that many goods and services are becoming nearly free, abundant,
and no longer subject to market forces. While economists have always
welcomed a reduction in marginal cost, they never anticipated the
possibility of a technological revolution that might bring those costs
to near zero.
The first inkling of the paradox came in 1999 when Napster, the music
service, developed a network enabling millions of people to share music
without paying the producers and artists, wreaking havoc on the music
industry. Similar phenomena went on to severely disrupt the newspaper
and book publishing industries. Consumers began sharing their own
information and entertainment, via videos, audio and text, nearly free,
bypassing the traditional markets altogether.
The huge reduction in marginal cost shook those industries and is now
beginning to reshape energy, manufacturing and education. Although the
fixed costs of solar and wind technology are somewhat pricey, the cost
of capturing each unit of energy beyond that is low. This phenomenon has
even penetrated the manufacturing sector. Thousands of hobbyists are
already making their own products using 3-D printers, open-source
software and recycled plastic as feedstock, at near zero marginal cost.
Meanwhile, more than six million students are enrolled in free massive
open online courses, the content of which is distributed at near zero
marginal cost.
Industry watchers acknowledge the creeping reality of a
zero-marginal-cost economy, but argue that free products and services
will entice a sufficient number of consumers to purchase higher-end
goods and specialized services, ensuring large enough profit margins to
allow the capitalist market to continue to grow. But the number of
people willing to pay for additional premium goods and services is limited.
Now the phenomenon is about to affect the whole economy. A formidable
new technology infrastructure — the Internet of Things — is emerging
with the potential to push much of economic life to near zero marginal
cost over the course of the next two decades. This new technology
platform is beginning to connect everything and everyone. Today more
than 11 billion sensors are attached to natural resources, production
lines, the electricity grid, logistics networks and recycling flows, and
implanted in homes, offices, stores and vehicles, feeding big data into
the Internet of Things. By 2020, it is projected that at least 50
billion sensors will connect to it.
People can connect to the network and use big data, analytics and
algorithms to accelerate efficiency and lower the marginal cost of
producing and sharing a wide range of products and services to near
zero, just as they now do with information goods. For example, 37
million buildings in the United States have been equipped with meters
and sensors connected to the Internet of Things, providing real-time
information on the usage and changing price of electricity on the
transmission grid. This will eventually allow households and businesses
that are generating and storing green electricity on-site from their
solar and wind installations to program software to take them off the
electricity grid when the price spikes so they can power their
facilities with their own green electricity and share surplus with
neighbors at near zero marginal cost.
Cisco forecasts that by 2022, the private sector productivity gains
wrought by the Internet of Things will exceed $14 trillion. A General
Electric study estimates that productivity advances from the Internet of
Things could affect half the global economy by 2025.
THE unresolved question is, how will this economy of the future function
when millions of people can make and share goods and services nearly
free? The answer lies in the civil society, which consists of nonprofit
organizations that attend to the things in life we make and share as a
community. In dollar terms, the world of nonprofits is a powerful force.
Nonprofit revenues grew at a robust rate of 41 percent — after adjusting
for inflation — from 2000 to 2010, more than doubling the growth of
gross domestic product, which increased by 16.4 percent during the same
period. In 2012, the nonprofit sector in the United States accounted for
5.5 percent of G.D.P.
What makes the social commons more relevant today is that we are
constructing an Internet of Things infrastructure that optimizes
collaboration, universal access and inclusion, all of which are critical
to the creation of social capital and the ushering in of a sharing
economy. The Internet of Things is a game-changing platform that enables
an emerging collaborative commons to flourish alongside the capitalist
market.
This collaborative rather than capitalistic approach is about shared
access rather than private ownership. For example, 1.7 million people
globally are members of car-sharing services. A recent survey found that
the number of vehicles owned by car-sharing participants decreased by
half after joining the service, with members preferring access over
ownership. Millions of people are using social media sites,
redistribution networks, rentals and cooperatives to share not only cars
but also homes, clothes, tools, toys and other items at low or near zero
marginal cost. The sharing economy had projected revenues of $3.5
billion in 2013.
Nowhere is the zero marginal cost phenomenon having more impact than the
labor market, where workerless factories and offices, virtual retailing
and automated logistics and transport networks are becoming more
prevalent. Not surprisingly, the new employment opportunities lie in the
collaborative commons in fields that tend to be nonprofit and strengthen
social infrastructure — education, health care, aiding the poor,
environmental restoration, child care and care for the elderly, the
promotion of the arts and recreation. In the United States, the number
of nonprofit organizations grew by approximately 25 percent between 2001
and 2011, from 1.3 million to 1.6 million, compared with profit-making
enterprises, which grew by a mere one-half of 1 percent. In the United
States, Canada and Britain, employment in the nonprofit sector currently
exceeds 10 percent of the work force.
Despite this impressive growth, many economists argue that the nonprofit
sector is not a self-sufficient economic force but rather a parasite,
dependent on government entitlements and private philanthropy. Quite the
contrary. A recent study revealed that approximately 50 percent of the
aggregate revenue of the nonprofit sectors of 34 countries comes from
fees, while government support accounts for 36 percent of the revenues
and private philanthropy for 14 percent.
As for the capitalist system, it is likely to remain with us far into
the future, albeit in a more streamlined role, primarily as an
aggregator of network services and solutions, allowing it to thrive as a
powerful niche player in the coming era. We are, however, entering a
world partly beyond markets, where we are learning how to live together
in an increasingly interdependent, collaborative, global commons.
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